Labsource Trustee Brings A Fraudulent Action Against Luxor Scientific, Innovative Scientific Solutions & Others
June 8, 2021, District of South Carolina – Trustee John K. Fort for the bankruptcy estate of Labsource, LLC (“Debtor”) brings a lawsuit against a clinical laboratory, a scientific consulting firm, and a few others for an alleged actual and constructive fraud under Sec. 548 of the Bankruptcy Code.
Allegedly, under an asset purchase agreement one of the Defendants, LS Acquisition paid $350,000 to Debtor for a portion of its assets. The Trustee asserts that LS Acquisition and the remaining Defendants (Luxor Scientific, Luxor Solutions, LLC, and Innovative Scientific Solutions, LLC) allegedly received substantially more than what they paid for. According to the complaint, all the Defendants received the benefit of what was transferred by the Debtor.
As alleged in the Trustee’s complaint, the Defendants received the entirety of the Debtor’s operations, including, all eight of its active lab collector employees, all clinical operations, its IT services, its computers, its email addresses, its domain name, its uninterruptable power supplies, and its transport van and in exchange, the Defendants merely paid $350,000 to the Debtor.
The Trustee contends that the alleged transfer allowed Defendants to seamlessly transfer the forty percent (40%) of third-party testing that Labsource was conducting to its facilities and, consequently, realize the proceeds therewith. At the time of the alleged transfer, Labsource purportedly had a valuation of $5,240,000.00, exclusive of the equipment that the Defendants paid something for. The Trustee argues that the equipment that the Defendants paid for had a book value of over $200,000.00 more than the $350,000.00 that the Defendants paid.
Thus, the Trustee requests the Court to enter an order granting judgment for Trustee and voiding the transfer from Labsource to Defendants fas fraudulent under 11 U.S.C. § 548 The Trustee also urges the Court for a judgment according to 11 U.S.C. § 550, ordering recovery of the value of the property from the Defendants pursuant to 11 U.S.C. § 550 since the Debtor did not receive reasonably equivalent value from the Defendants for the transfer.
The case is In re Labsource, LLC in the United States Bankruptcy Court for the District of South Carolina, Case Number – 19-05161. Smith Hudson Law is representing the Trustee in the case.